All the passages below are taken from the book by Graham
Allison and Robert D Blackwill with Ali Wyne, " Lee Kuan Yew: The Grand
Master's Insights on China, the United States, and the World” published in 2012.

How likely is a major
confrontation between the United States and China? What role should the balance
of power play in America's strategy for addressing the rise of China? How should
U.S. policies and actions adjust to deal with the rise of China? What policies
and actions should the United States avoid in dealing with the rise of China?
Can U.S. policies and actions significantly influence China's trajectory and
behavior as it emerges as a great power? How should Chinese policies and actions
adjust to establish a sustained cooperative relationship with the United States?
Managing a changing relationship with China is a central challenge of U.S.
foreign policy in the 21st century. In his answers to these questions, Lee Kuan
Yew offers his advice to U.S. leaders.

How likely is a major confrontation between the United States and China?

This is not the Cold War. The Soviet Union was contesting the U.S. for
global supremacy. China is acting purely as China in its own national interests.
It is not interested in changing the world.1

There will be a struggle for influence. I think it will be subdued because the
Chinese need the U.S., need U.S. markets, U.S. technology, need to have students
going to the U.S. to study ways and means of doing business so they can improve
their lot. It will take them 10, 20, 30 years. If you quarrel with the U.S. and
become bitter enemies, all that information and technological capabilities will
be cut off. The struggle between the two countries will be maintained at the
level that allows them to still tap the U.S.2

Unlike U.S.-Soviet relations during the Cold War, there is no
irreconcilable ideological conflict between the U.S. and a China that has
enthusiastically embraced the market.... Sino-U.S. relations are both
cooperative and competitive. Competition between them is inevitable, but
conflict is not.3

After the collapse of the Soviet Union, the U.S. and China are more likely to
view each other as competitors if not adversaries. But the die has not been
cast. The best possible outcome is a new understanding that when they cannot
cooperate, they will coexist and allow all countries in the Pacific to grow and
thrive.4

A stabilizing factor in their relationship ... is that each nation requires
cooperation from and healthy competition with the other. The danger of a
military conflict between China and the U.S. is low. Chinese leaders know
that U.S. military superiority is overwhelming, and will remain so for the next
few decades. They will modernize their forces not to challenge America but to be
able, if necessary, to pressure Taiwan by a blockade, or otherwise to
destabilize the economy5.

China will not let an international court arbitrate territorial disputes in
the South China Sea, so the presence of U.S. firepower in the Asia-Pacific
will be necessary if the United Nations Law of the Sea is to prevail.6

What role should the balance of power play in America's strategy
for addressing the rise of China?

Prudence dictates that there be a balance of power in the Asia-Pacific
region. This is reflected in a widely held consensus that the U.S. presence in
the region should be sustained.... A military presence does not need to be used
to be useful. Its presence makes a difference, and makes for peace and stability
in the region. This stability serves the interest of all, including that of
China.7

Peace and security both in Europe and in the Pacific still depend on a balance
of power. A U.S. military presence in both regions is very necessary.
However, unless the U.S. economy becomes more dynamic and less debt-laden, this
presence will be much reduced by the end of this decade [the 1990s]. The
longer-term outlook then becomes problematic. Even if the U.S. deficits are
reduced, industrial productivity improves, and exports increase, the U.S.
nevertheless cannot afford and will not be willing to bear the whole cost of the
global security burden.... The great danger is that the U.S. economy does not
recover quickly enough, and trade frictions and Japan bashing increase as
America becomes protectionist. The worst case is where trade and economic
relations become so bad that mutual security ties are weakened and ruptured.
That would be a dreadful and dangerous development.8

The world has developed because of the stability America established. If that
stability is rocked, we are going to have a different situation.9

The size of China makes it impossible for the rest of Asia, including Japan and
India, to match it in weight and capacity in about 20 to 30 years. So we need
America to strike a balance.10

The question is whether the U.S. can continue its role as a key security and
economic player in the Pacific. If she can, East Asia's future is excellent. But
there will be problems if the U.S. economy does not recover its competitiveness
within the next ten years.11

The U.S. cannot afford to abandon Japan unless it is willing to risk losing
its leverage on both China and Japan. Whether or not there is an
America-Japan Mutual Security Treaty, the only stable balance that can be
maintained is a triangular one between Japan and the U.S. on the one side and
China on the other. This is inevitable because of China's potential weight,
which far exceeds that of the U.S. and Japan combined.12

Why should the U.S. stay engaged to help East Asia's combined GNP
[gross national product] to exceed that of North America? Why not disengage and
abort this process? Because this process is not easily aborted. It will be
slowed or stalled for some years, but only until Japan, China, Korea, and the
Russian Republic establish a new balance. However, no alternative balance can be
as comfortable as the present one, with the U.S. as a major player... The
geopolitical balance without the U.S. as a principal force will be very
different from that which it now is or can be if the U.S. remains a central
player. My generation of Asians, who have experienced the last war, its horrors
and miseries, and who remember the U.S. role in the phoenix-like rise from the
ashes of that war to prosperity of Japan, the newly industrializing economies,
and ASEAN [the Association of Southeast Asian Nations], will feel a keen sense
of regret that the world will become so vastly different because the U.S.
becomes a less central player in the new balance.13

President Nixon was a pragmatic strategist. He would engage, not contain, China,
but he would also quietly set pieces into place for a fallback position should
China not play according to the rules as a good global citizen. In such
circumstances, where countries will be forced to take sides, he would arrange to
win over to America's side of the chessboard Japan, Korea, ASEAN, India,
Australia, New Zealand, and the Russian Federation.14

How should U.S. policies and actions adjust to deal with the rise of china?

For America to be displaced, not in the world, but only in the western
Pacific, by an Asian people long despised and dismissed with contempt as
decadent, feeble, corrupt, and inept is emotionally very difficult to accept.
The sense of cultural supremacy of the Americans will make this adjustment most
difficult. Americans believe their ideas are universal---the supremacy of the
individual and free, unfettered expression. But they are not---never were. In
fact, American society was so successful for so long not because of these ideas
and principles, but because of a certain geopolitical good fortune, an abundance
of resources and immigrant energy, a generous flow of capital and technology
from Europe, and two wide oceans that kept conflicts of the world away from
American shores.15

Americans have to eventually share their preeminent position with China.16

The U.S. cannot stop China's rise. It just has to live with a bigger China,
which will be completely novel for the U.S., as no country has ever been big
enough to challenge its position. China will be able to do so in 20 to 30 years.17

The size of China's displacement of the world balance is such that the world
must find a new balance in 30 to 40 years. It is not possible to pretend that
this is just another big player. This is the biggest player in the history of
the world.18

The U.S. Congress is against any new free-trade agreements. If the next Congress
continues to oppose FTAs, valuable time will be lost, and it may be too late to
try again. Congress must be made to realize how high the stakes are and that the
outlook for a balanced and equitable relationship between the American and
Chinese markets is becoming increasingly difficult. Every year, China attracts
more imports and exports from its neighbors than the U.S. does from the region.
Without an FTA, Korea, Japan, Taiwan, and the ASEAN countries will be integrated
into China's economy---an outcome to be avoided.19

What policies and actions should the United States avoid in dealing
with the rise of China?

Do not treat China as an enemy from the outset. Otherwise, it will develop a
counterstrategy to demolish the U.S. in the Asia-Pacific; in fact, it is already
discussing such a strategy. There will inevitably be a contest between the
two countries for supremacy in the western Pacific, but it need not lead to
conflict.20

The baiting of China by American human rights groups, and the threatening of
loss of most-favored-nation status and other sanctions by the U.S. Congress and
administration for violations of human rights and missile technology transfers
... ignore differences of culture, values, and history, and subordinate the
strategic considerations of China-U.S. relations to an American domestic agenda.
Such a haphazard approach risks turning China into a long-term adversary of the
U.S. Less sensitivity and more understanding of the cultural realities of China
can make for a less confrontational relationship.21

With the disintegration of the Soviet Union, U.S.-China relations are no longer
anchored in a common threat. The U.S. has yet to settle on a bipartisan policy
on China. China has the potential to become a superpower. America's interest is
to maintain the status quo, where it is the only superpower, but in 30 years,
China's growth could challenge this preeminence.... U.S. policy towards China
has been driven by extraneous factors, like the saturation media coverage of
Tiananmen, the plight of Chinese dissidents fleeing persecution, democracy,
human rights, and most-favored-nation status, autonomy for Tibet and the Dalai
Lama, and Taiwan seeking to become an independent United Nations member...
Issues which challenge China's sovereignty and unity will arouse China's
hostility. To emphasize such issues makes sense only if it is U.S. policy to
contain China and to slow down or abort its rapid economic growth.
22

Massive economic reforms have opened up China. If liberalization is the goal of
U.S. policy, then more trade and investments are the answers. Instead, the U.S.
threatens to derail this process by cutting off most-favored-nation status. The
State Department draws up its report on China's human rights like a headmaster
drawing up a pupil's annual report for the parents. This may make Americans feel
good and Chinese look small, but East Asians are uneasy over its long-term
consequences.23

It is the U.S., more than any other country, that can integrate China into the
international community.... The difficulty arises from America's expressed
desire to make China more democratic. China resents and resists this as
interference in its domestic matters. Outside powers cannot refashion China
into their own image.... American society is too pluralistic, its interests
too varied to have a single or unanimous view of China. Sometimes the language
of discourse in America has caused the Chinese to wonder if by engagement the
U.S. does not mean an engagement in combat.... China has to be persuaded that
the U.S. does not want to break up China before it is more willing to discuss
questions of world security and stability.24

Can U.S. policies and actions significantly influence China's trajectory and
behavior as it emerges as a great power?

Yes indeed. If the U.S. attempts to humiliate China, keep it down, it
will assure itself an enemy. If instead it accepts China as a big, powerful,
rising state and gives it a seat in the boardroom, China will take that place
for the foreseeable future. So if I were an American, I would speak well of
China, acknowledge it as a great power, applaud its return to its position of
respect and restoration of its glorious past, and propose specific concrete ways
to work together.25

Why should the U.S. take on China now when it knows that doing so will
create an unnecessary adversary for a very long time---and one that will grow in
strength and will treat it as an enemy? It is not necessary. The U.S. should
say: We will eventually be equal, and you may eventually be bigger than me, but
we have to work together. Have a seat, and let us discuss the world's problems.26

This is the fundamental choice that the United States has to make: to engage or
to isolate China. You cannot have it both ways. You cannot say you will engage
China on some issues and isolate her over others. You cannot mix your signals.27

America's greatest long-term influence on China comes from playing host to the
thousands of students who come from China each year, some of the ablest of
Chinese scholars and scientists. They will be the most powerful agents for
change in China.28

As China's development nears the point when it will have enough weight to
elbow its way into the region, it will make a fateful decision---whether to be a
hegemon, using its economic and military weight to create a sphere of influence
... or to continue as a good international citizen.... It is in everyone's
interest that before that moment of choice arrives, China should be given
every incentive to choose international cooperation which will absorb its
energies constructively for another 50 to 100 years. This means China must
have the economic opportunities to do this peacefully, without having to push
its way to get resources like oil, and have access to markets for its goods and
services.... If such a route is not open to China, the world must live with a
pushy China.... The United States can through dialogue and cooperation with
China chart a course to manage China's transition in the next 20-30 years into a
big power.... China is an old civilization and will not easily change because
of external pressure or sanctions. But changes will come when their leaders,
thinkers, and intellectuals become convinced on their own that adopting certain
attributes and features of other societies will benefit China.29

The best way to quicken the pace and direction of political change in China is
to increase her trade and investment links with the world. Then her prosperity
will depend increasingly on the compatibility of her economic system with those
of the major trading nations. And wide-ranging contacts will influence and
modify her cultural values and moral standards.30

Integrating China into the global system will build up strong vested interests
in China to play by international rules. It will increase China's
interdependence for trade, services, investments, technology, and information.
These interdependent links could increase to a point where to break them in a
unilateral breach of international obligations would carry unbearable costs.31

Peace and security in the Asia-Pacific will turn on whether China emerges as
a xenophobic, chauvinistic force, bitter and hostile to the West because it
tried to slow down or abort its development, or educated and involved in the
ways of the world, more cosmopolitan, more internationalized and outward-looking.32

How should Chinese policies and actions adjust to establish a sustained
cooperative relationship with the United States?

From 1945 to 1991, China was engaged in a series of wars that nearly broke
them.... This generation has been through hell: the Great Leap Forward, hunger,
starvation, near collision with the Russians ... the Cultural Revolution gone
mad.... I have no doubt that this generation wants a peaceful rise. But the
grandchildren? They think that they have already arrived, and if they begin to
flex their muscles, we will have a very different China. . . . Grandchildren
never listen to grandfathers. The other problem is a more crucial one: if
you start off with the belief that the world has been unkind to you, the world
has exploited you, the imperialists have devastated you, looted Beijing, done
all this to you ... this is no good.... You are not going back to old China,
when you were the only power in the world as far as you knew.... Now, you are
just one of many powers, many of them more innovative, inventive, and
resilient.... If I were America, Europe, or Japan, I would spend time to make
sure that the mindset of the younger generation is not one of hostility, but one
of acceptance and an understanding that you are now a stakeholder, which was Bob
Zoellick's very apt description of their role. . . . Make them feel that they
are stakeholders, and if this earth goes warm, they will be in as much trouble
as anyone else.33

It is vital that the younger generation of Chinese, who have only lived during a
period of peace and growth in China and have no experience of China's tumultuous
past, are made aware of the mistakes China made as a result of hubris and
excesses in ideology. They have to be imbued with the right values and attitudes
to meet the future with humility and responsibility. The authors of China's
doctrine of peaceful emergence are acutely conscious that as China resumes its
recovery, it has the responsibility and self-interest to assure its neighbors,
and the world at large, that its emergence is benign, not a threat, but a plus
for the world, that it will try to avoid disruption and conflict.... China is
aware of the problems its rapid growth will present to the rest of the world and
wishes to work together with the international community to minimize the
disturbance. It is to the good of China to study how to mitigate the adverse
impacts of its growth.34

The ways in which Chinese superiority will be expressed will undoubtedly be
quite different than in the earlier era. Take the current case of East Asia,
where they have, obviously, established a dominant economic position in
relations with their neighbors, and used that position including access to a
market of 1.3 billion people and significant investments in other countries to
their advantage. If states or enterprises do not accept China's position and
pay appropriate deference, they are faced with the threat of being shut out of a
rapidly growing market with 1.3 billion people.35